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California mostly clears out as Chile begins shipping

The pipeline should be clean when Chilean clementines begin arriving in the second half of May, paving the way for strong demand, importers said.

California shippers will wind down at different times, said Matt Gordon, Chilean program manager for DNE World Fruit Sales, Fort Pierce, Fla.

However, the net result will be a timely end to the Golden State, clearing the decks for Chile.

“I’m hearing different stories out of California,” he said April 14. “The middle to minor players will be done shortly. There’s one who will ship all the way through May, but they can’t supply everybody.”

After California’s done, it won’t be until mid-June when Chile’s next clementine competitor, South Africa, enters the deal, Gordon said.

“There may be a three to four week window where there’s only Chilean,” he said.

On the West Coast, Chile should be the only game in town for most of the season, Gordon said. West Coast shipments of Australian clementines will be limited, and they won’t likely arrive until September.

This season aside, demand for Chilean clementines remain strong in the U.S., and acceptance continues to grow, Gordon said.

“It has a good history and I think retailers like it,” he said. “Chilean clementines have good flavor and good color.”

David Mixon, senior vice president and chief marketing officer of Seald Sweet International, Vero Beach, Fla., also foresees a good transition from California to Chile this season.

Mixon doesn’t want a completely empty pipeline, however, if it means there could be a supply gap.

“You don’t want a situation where consumers aren’t able to get clementines,” he said. “The key is not to lose shelf space.”

Chilean clementines continue to gain traction on U.S. retail shelves, and 2011 should be no different, Mixon said.

“There’s been tremendous growth in the last two years alone, and I don’t see it slowing down at all,” he said. “I still think we’ve barely scratched the surface.”

“Like it or not , it’s cannibalizing the other citrus categories,” he said.

For that, California deserves much of the credit, Mixon said. The growth of the Golden State’s clementine industry has built varietal recognition among consumers, he said.

By the time summer rolls around, more and more consumers are excited about Chilean clementines because of their exposure to California fruit, he said.

“The production out of the west has helped immensely,” Mixon said.

In consumer research Seald Sweet commissioned in 2010, the company was happy to discover that consumers view clementines and other citrus varieties as a year-round fruit, Mixon said — people don’t want clementines only if they’re from Spain, Morocco or California. They want them, period, which means in the summer they want Chilean product.

An early end to the California clementine deal could help increase demand for Chilean fruit, which should begin arriving in the U.S. in late May or early June, said James Milne, business development director for Vancouver, British Columbia-based The Oppenheimer Group.

“There’s a belief that California will clean up earlier than usual,” Milne said. “It was first thought they would go through May or early June.”

Demand should be particularly strong in June, but Milne expects a good summer overall.

“All indications are Chile should have a good run,” he said.

South African clementines will provide summer competition on the East Coast, Milne said.

On the West Coast, shipments of Australian easy-peelers could be limited by exchange rates and high input costs, he said.

Volumes could be down, particularly at the beginning of the deal, because of drought, but St. Laurent, Quebec-based Fisher Capespan Inc. still expects to grow its Chilean clementine deal this season, said Mark Greenberg, senior vice president of procurement.

Fisher Capespan looks forward to an empty pipeline when fruit begins shipping at the end of May, Greenberg said.

“We absolutely expect the market to be clear of easy peelers” when the Chilean clementine deal begins, he said. “People are pretty excited about the product.”

South African product will provide some North American competition for Chilean clementines when it begins shipping in June, Greenberg said.

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About the Author:

Andy Nelson, markets editor

Andy Nelson joined The Packer as a staff writer in 2001. He became the paper's Handling & Distributing editor in 2005 and markets editor in 2006. Before joining Vance, Nelson was a staff writer for The Kansas City Star.